Sinking Revenues Continue in NJ [AUDIO]
Late last month, Dr. David Rosen, the lead budget analyst with the non-partisan Office of Legislative Services (OLS) estimated that over the next 14 months state revenues will lag $1.3 billion behind Governor Chris Christie's projections. Christie expects the budget gap to be about $676 million. Yesterday, Rosen was out with more bad news. According to OLS, tax collections for May are $50 to $100 million below last month's dismal projections.
Asked how this year's budget can be balanced so that next year's spending plan can be finalized before the midnight June 30th deadline, Assembly Budget Committee chairman Vinnie Prieto says, "We need to be mindful of where we make cuts so we'll really be looking at this closer as we see the actual numbers………I will ask Treasury to see their recommendations for this shortfall. How do we handle it?"
Prieto and his fellow Assembly Democrats are pushing as plan to provide a 20% property tax cut to New Jerseyans with annual household incomes of $250,000 and less. Christie says that plan is dead because it includes a tax increase on millionaires. The Governor has twice vetoed the tax hike.
Christie wants a 10% income tax cut for all residents and the Senate democrats want a 10% property tax cut. Prieto says Christie's plan clearly favors the rich and, "Sound bites and catchy phrases are not what the residents of New Jersey are looking for."
Kevin Roberts, a spokesman for the Governor says, "It's not shocking that Assemblyman Prieto and his Democratic colleagues in the Assembly are still jumping for joy at OLS' consistently off the mark projections. They're too concerned with rooting for New Jersey's failure so they can justify their obsession with raising taxes on hard working families. Why would they let reality stand in the way of raising taxes when they have a partisan office backing them up along the way?"
In addition, Roberts says, "Based on the May revised figures as detailed by the Treasurer last month, not the OLS figures, we actually know that projections are slightly off for May by a manageable $28.9 million across the big three revenue categories. This isn't quite the speculative and panicked $50-100 million range that David Rosen is suggesting for the entire year. While Rosen has already assumed the worst for the next two months, the actual May figures still manage to keep us on track to meet expectations for fiscal year 2012 and fiscal year 2013.
Roberts adds, "We tallied Corporate Business Tax collections as being $38.7 million OVER projections, Sales Taxes (April) at $19.866 million UNDER projections, and Gross Income Tax collections at $47.78 million UNDER projections."
After hearing Rosen's estimates last month, Christie blasted the budget expert calling him, "The Dr. Kevorkian of the numbers." The Governor says OLS is partisan and always has been. He claims it caters to the majority party in New Jersey which currently happens to be the Democrats.
It is crystal clear that the Governor doesn't buy Rosen's earlier projections. Last month, Christie said, "Nobody in New Jersey believes David Rosen anymore, nobody, and nobody should…..He's so wrong for so long that his credibility is now gone….Why would anybody with a functioning brain believe this guy? How often to you have to be wrong to finally be dismissed?"
At least one of Rosen's predictions was 100% true. Even before Christie's tirade, Rosen had this to say to the Assembly Budget Committee, "I suspect that some of the conversation today and in the next few weeks will concern contrasting revenue estimates. The first lesson that should be learned by a revenue estimator is humility."
"All revenue estimates are wrong, particularly when the economy does things that are unexpected on the upside or downside, revenue estimates can be fairly substantially wrong," said Rosen, also before Christie blasted him. "It's absolutely true that sometimes we're wrong on the high side and sometimes we're wrong on the low side and we probably should be. If we were consistently wrong in one direction it might suggest a bias of one kind or another. When we're wrong we're just wrong because we missed."